Dealing with loss mitigation on 2nd mortgage

[maddog2112]

I`ve been discharged and now I`m thinking I should have negotiated a reaffirmation with my 2nd mortgage. My lawyer recommended against reaffirmation for all the obvious reasons. However, I think I could have negotiated alot better deal thru reaffirmation on the second IE: lower principal and or lower payment. At this point, the 2nd mortgage company can give me no information, and the only relief possible is thru mitigation, for a lower interest rate, payment, or settlement. I`m not sure how that works, since the 2nd has already been discharged. The guy said I would have to fill out a loss mitigation form to see what they could do. Is this some sort of backdoor reaffirmation? I tell you all this in case anyone has been thru this and can offer information, and or as a learning experience for others, which is what this forum is all about. I`m only 1 payment behind and can, as well as may catch up as the easiest option. I was just curious, if a better deal could be had. I am not upside down, so that doesn`t help my negotiating position. I know some may think I`m crazy, but I want to keep the house.

[SleepWellNow]

When we got a mod on our first loan, a reaffirmation of the debt was part of the agreement. Fortunately for us, because we signed it prior to our discharge, the lender was required to file the reaffirmation with the court before our discharge came through. The lender ran out of time and it was never done. Our mod still went through but, legally, our loan wasn't reaffirmed. All that said, a mod on your second may require a reaffirmation of the debt.

If you are only 1 payment behind, can get current and maintain the payments, it seems to me it would be better to just continue making the payments. Especially if you have equity in the house. The best deals are made on seconds that are not secured by any equity. You can go through the steps to try and get a lower interest rate and, if a mod is offered, see if it requires a reaffirmation. Unless the rate and payments are substantially lowered, it may not be worth reaffirming.

[maddog2112]

Thanks sleep wellnow. l`m on a fact finding mission right now. One thing I`ve learned from this forum, is knowledge is power. Thanks

[logansdad]

I am going through that same thing now and patiently waiting for "the decision" I am in a bit of a different situation (although maybe not that bad) My 1st (137k) and 2nd (38k)are with the same lender, but I believe they may have sold the 1st but still retain the 2nd. Anyhow they sent out the paperwork and I called them and said that if you want me to sign both reaffirms' that they would have to change the 2nd to 4.75% from 6.00% since my 1st is 4.75% and reduce the 2nd to the amount of the appraisal (172K). From 38k down to 33k. Apparently they didn't respect the 6 month old appraisal and decided to appraise it again, since May 3 more foreclosures sold in our hood one for 102k from 185k. Now it appears that their appraisal is even lower, they wont tell me how much nor will they discuss with me the new amount I keep hearing that it is still under review. My 341 is in 2 1/2 weeks and I have a feeling that they will show up with the reaffirm and demand that I sign it on the spot.
Here is the deal the fact that they are even willing to work with me and reduce the 2nd tells me they know they are vulnerable. So if I don't hear anything by next week I am calling them and telling them that I demand to see the new appraisal and that the amount must = the 1st 137k and the 2nd should be reduced to the new appraised amount which could be 150k so 13k or so, or I sign nothing. Now after 3 weeks of thinking about it I may not reaffirm anything now and just stop paying the 2nd after the discharge.

[maddog2112]

I would think they would make the deal your looking for as it makes good sense to them. I probably could have made a deal with my second and reffirmed but I didn`t. I called to check my balance and found noone could talk to me about the account, except the loss mitigation guy. That`s when he started telling me that they are interested in working with me if I fill out their loss mitigation form, to modify the loan. I`m thinking it sounds like some sort of backdoor reaffirmation, if their is such a thing. I was hoping someone on the forum had had experience with this. So far not much luck. i don`t think not paying your 2nd will get you anywhere. The guy told me if the 2nd is not paid, it would probably be sold to a collections. HHM on this forum said, they would conrinue to have a lien on the house with interest and late fees accruing. That would definately come back to haunt you if you ever sell the property. I guess, with interest and late fees, it could build alot higher than the original amount.

[StartingOver08]

Look up the posts by Relief in California - she was able to not reaffirm her second and actually got a release of lien from CitiMortgage for somewhere around 12% or so (I can't remember the exact amount right now). Her posts are worth reading.